This post was inspired by a podcast I guested on with Andy Webb from Be Clever with your Cash. Part of the interview was quick-fire questions, one question being my biggest financial regret.
Have a listen to the podcast, it’s a fab insight into both Andy and my financial lives and we chat about de-cluttering, financial independence for women and terms and conditions. This is a great podcast if I say so myself!!
Reaching 40 this month is causing reflection on the decisions I have made over the years. I have made some huge financial decisions in my life, which could have been deemed to have been the wrong decision or not the best use of money. Of course there are others that were really quite clever or maybe lucky, I’ll write about them in another post!
Not paying into my pension until the age of 31
I remember feeling relieved at the age of 22 that I wasn’t allowed to join the HSBC pension scheme (you had to be 25). I wanted as much of that first job salary into my pocket, not into a pot that I wouldn’t be able to touch for 40ish years. So when I was able to start contributing at the age of 25 I declined. And then when I switched over to work for Tesco’s, aged 27, I declined to pay into my pension there as well.
This was a bad decision, this was life before children and actually my richest time in life so I 100% could have afforded to pay into the pension. I missed out on double the amount of contribution from my employers as well. I would hate to think what that is actually worth in terms of my actual pension pot.
After some recent organisation and assessment of my pensions written about here, all has been consolidated into one place and I have 45k built up from subsequent companies worked for in my 30’s. But this 45k although sounding like a lot is only actually worth £4500 per year when I retire. I have a long way to go to build enough money for retirement.
Please please please pay into your pension as early as possible and from as young an age as possible. It will be worth it I promise.
Spending A LOT on material goods such as designer handbags
Maybe linked to my spending habits ingrained from my 20’s, but I had a bit of an addiction to designer handbags. I bought my first Louis Vuitton wallet aged 23 with my first ever bonus. Over the years I have bought 2 Louis Vuitton wallets, 2 Louis Vuitton Bags, 1 Louis Vuitton Filofax case(!!), 1 Gucci bag, 1 Christian Dior bag, 2 Prada bags. Cost of these bags..sadly I know as I have kept all the receipts – £4,500…that is rather eye-watering.
Why did I buy these? At the time I used to reward myself for every new promotion or bonus with a bag. I loved those bags and loved the fact that I could buy them if I wanted, they were status symbols.
I have just recently started selling them off on eBay. They were gathering dust under the bed (in their dust bags obviously), it just didn’t make sense to keep them anymore. So far I’ve sold 2 wallets and I’ve made £200, keeping the receipts has helped me out there proving they are the real deal. So I guess they are now providing me with an income, next to sell is the £1000 Christian Dior bag.
Spending a ridiculous amount of money on dining out
Another extravagance that has resulted in £1000’s of pounds being spent. Now part of me isn’t sure this is a regret because we loved every minute of it. Except for that 15-course tasting meal in Joel Robuchon’s 3 Michelin star Las Vegas restaurant, the bill was $1200 for 2 of us. Ridiculous.
Since hubby and I got together in 2004 we have maybe eaten in amazing restaurants 4 times a year for birthdays, or anniversaries or holidays. Each meal costing £500, as its usually tasting menus with wine. So after 12 years = 12* 4 * £500 = £24,000. OH, MY GOSH. That’s just astounding. Okay, I’m feeling slightly regretful now about all that money spent on food.
Oh, but the experiences we have had, cheese soufflé and meeting Michel Roux, Heston Blumenthal’s Bray restaurant before it closed, Gordon Ramsey’s Royal Hospital Rd. We have eaten well and have had a wonderful experience eating and drinking. So, I’m feeling less regretful about this one.
What happened to all that Redundancy money?
I have been made redundant 4 times in my life. Whilst at university I was made redundant from my Marks & Spencer graduate scheme before it began (they ran out of money big time in 1999). I took voluntary redundancy from Tesco in 2007. Threshers went into administration in 2009 so I eventually got some redundancy there. And I took redundancy following relocation from EE in 2015.
I blew my M&S redundancy of £1500. I was 22 who knows what I spent it on. The Tesco money was substantial, £25k in total. It paid for our wedding, our amazing honeymoon to Capri & Positano and gave me one year of not working whilst pregnant and after Dylan was born. The Threshers money was more complicated. Redundancy pay was £800 with less than two years’ service. And my notice pay took 3 years to be paid in the administration period so I only got 30p in each pound owed so I ended up with maybe £3k which was rather extravagantly invested in a painting.
And then the money I got from EE, I had worked my way up the corporate ladder and had 5 years’ service…I got a nice chunk of cash around £40k. I did use it to buy a few big things, it paid for a holiday to Vegas & New York. A holiday to Spain with boys for 2 weeks. Hubby’s 40th birthday. And then the rest has paid the bills whilst building up the business to a point where it is earning enough. It’s now all gone.
So, there is £80k there in additional money I have received and spent rather than invested in the house and that’s not even including inflation and the fact that the money is worth more today than it was then. We have an outstanding mortgage of £200k, maybe just maybe we could have been mortgage free if all this money had been invested in the house? Do you know what, the thought NEVER entered my mind of putting the money into the mortgage? There has always been something to spend the money on.
Do I think I made the wrong decision here, probably not? We had a fab wedding and hubby had a brilliant 40th birthday. And we’ve had some amazing holidays for us as a couple and as a family. A slight concern that we could be mortgage free..but really??
Are all of these financial regrets?
So, it turns out that I mostly don’t regret my financial decisions. Despite some of the amounts of money involved being huge and a potential for living mortgage free. Okay, it would be lovely to be mortgage free!!
The next post in this series of turning 40 musings will be all about my most sensible financial decisions.